CROWN POINT, Ind.--(BUSINESS WIRE)--Yesterday attorneys for UNITE HERE filed a petition for review of an order of the Indiana Gaming Commission. The Commission’s February order allows the sale of two casino properties currently owned by Pinnacle Entertainment, Inc. (NASDAQ: PNK) to Gaming and Leisure Properties, Inc. (NASDAQ: GLPI). UNITE HERE is seeking that the court stay the effectiveness of the order.
Pinnacle currently owns and operates two casinos in Indiana, the Belterra in Florence and Ameristar East Chicago. UNITE HERE claims the sale violates Indiana law which requires that “a person may not have an ownership interest in more than two (2) riverboat owner’s licenses.” In its complaint, UNITE HERE alleges the proposed purchase would cause GLPI to exceed that ownership limit, since GLPI already owns the Hollywood Casino in Lawrenceburg and the acquisition of the two Pinnacle casinos would give GLPI ownership of three Indiana casinos.
The petition was filed in Lake County Circuit Court, after UNITE HERE exhausted administrative remedies. UNITE HERE also seeks a stay of the Commission’s order prior to the completion of the sale. Pinnacle and GLPI have said that they plan to complete the sale transaction on April 28. UNITE HERE is also seeking a review of the Commission’s order.
“Indiana gaming law is clear: an owner is only allowed to own two licensed casinos. We believe the sale to GLPI would violate the 'two casino' rule in Indiana,” said Kate O’Neil, Research Coordinator at UNITE HERE.
Since February, when the Indiana Gaming Commission approved the transaction, the other remaining jurisdictions have given approval of the sale of Pinnacle’s casinos. Those states do not have a two casino rule like Indiana.
Regulators in Indiana, Missouri, and Louisiana included conditions in the approvals that require Pinnacle to report capital expenditures as a percentage of net revenue. In all three states, UNITE HERE had raised concerns about the leaseback model and whether it would leave the casino operators with sufficient cash to reinvest in the casinos.
Kendra Royster, a UNITE HERE researcher, who gave testimony before the Louisiana Gaming Control Board said, “We disagree with the decision by the gaming regulators in all the jurisdictions to allow the sale and leaseback to GLPI. However, we are encouraged that in Indiana, Missouri, and last week in Louisiana, the gaming boards listened and made it a requirement that Pinnacle report capital expenditures as a percentage of net revenue. With high rent payments, we remain concerned that operators leasing casinos will have little left to maintain properties. Reinvestment is crucial to a healthy gaming industry.”
UNITE HERE Local 1 is represented by Jeffrey Macey of Macey Swanson & Allman.